LMAX to move regulatory oversight to Ireland in the absence of passporting deal
19 October 2016 | 5245 views | 1
FCA regulated FX trading venue LMAX Exchange has warned that it will switch regulatory oversight to Ireland unless the British government preserves the EU single market passporting rights for the financial services industry.
The Exchange says the risk of losing access to 25% of the company’s current client base across 22 EU member states with one signature would represent a watershed moment for the company and deal a significant blow to London's status as a global FX powerhouse.
David Mercer, chief executive of LMAX Exchange, says: “The net effect to the economy could be severe with new foreign investment into financial services choosing the EU over the UK, and existing investment and jobs leaving the UK in short order. Furthermore, lost capital markets revenue and associated taxation income could be catastrophic for the UK."
Without any assurance on passporting rights, Mercer believes that it is "inevitable" that larger banks, funds and investment managers will follow in its footsteps.
"It is clear that our European counterparts are opportunistically targeting the current UK capital markets franchise and it is vital we proactively address the regulatory passport issue immediately," he says. "We urge the government to make this top of their agenda as they consider the timeline to an exit from the single market and provide guidance to our industry as soon as is practicable.”
He adds that LMAX Exchange will begin regulatory filings in Ireland in January 2017, if no UK Government assurances are received.